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2018 Economic Forecast: Manufacturing

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Kraft-Heinz recently renovated 55,000-square feet of its factory. Photo by Eric Crossan.

By Roger Morris
Special to Delaware Business Times 

Coming off a year when Delaware manufacturing jobs rose by almost one-half percent to about 26,000 workers, jobs growth in 2018 is expected to be similarly modest. According to local manufacturers and those who work in manufacturing-related organizations, three major trends will dominate the sector in the coming year:

Job growth will largely be organic

Most job growth will occur within businesses currently located within the state, with little expectations of immediate major manufacturing relocations to the region.

“One of the challenges we have at the Delaware Manufacturing Association is to reach out to growing companies in the state,” said Neil Nicastro, plant manager at PPG Industries’ Dover facility and a leader in the organization. “We try to get these companies in to discuss the challenges to growth they face, and we have seven sub-groups, such as health, advocacy and energy issues, to help in these areas.”

However, long-term growth may involve the relocation of heavier industries into the region, which was part of the rationale for the state changing some provisions of the Coastal Zone Act, to be more attractive for large manufactures to relocate here. Additionally, there are now recently abandoned locations available between Wilmington and the Pennsylvania border.

“I was very impressed when I recently visited the Navy Ship Yard in Philadelphia, and saw what they were doing,” Nicastro said of the 1,200-acre business campus, which is home to more than 12,000 employees and 152 companies. “I can’t help but think we can do something similar in Delaware.”

Programming and robotics part of training

Most of the jobs and job training will be concentrated on what is called “advance manufacturing” instead of traditional manufacturing skills.

“No employer is using the same machinery they were using 30 years ago,” said Rich Heffron, head of the Delaware State Chamber of Commerce, which means that new workers need to be trained in skills such as computer programming and robotics.

“The challenge is to find trained employees to replace older workers who are retiring,” Nicastro added.

Nicastro also thinks it’s important for young people to change their idea of manufacturing as a “dark and dirty” place, and he even invites parents to accompany their teens during career events at the PPG plant during the annual National Manufacturing Week.

Soft skills just as important

Employers are increasingly demanding that young potential workers be trained in “soft skills” as well as technical skills.

“We did a survey of state manufacturers to ask what job skills they are currently looking for,” said Paul Morris, head of workforce training at Delaware Technical Community College, “and we were surprised that about 90 percent said they needed better “˜soft’ skills, such as being skilled in leadership, teamwork and problem-solving.”

Nicastro added that some newly hired young employees have little understanding of workplace practices, even about work scheduling, being surprised that “they’re going to have to work a 40-hour week. What we really need is for more companies to provide job internships for training.”

Finally, while recent federal cuts in corporate tax rates may spur growth, James Butkiewicz, professor and chair of the Department of Economics at the University of Delaware, warned, “My concern is that the tax plan increases the fiscal deficit. This will appreciate the dollar and worsen our trade deficit, and this could hurt manufacturing and agriculture.”

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